tv Power Lunch CNBC November 25, 2013 1:00pm-2:01pm EST
s&p on track for its best year since 197. you know about walmart's story with the ceo switch but the other story developing in these markets is the fact that social media stocks are getting hit across the board, twitter, facebook, pandora, yelp, linkedin. i'm sure "power lunch" will continue to cover that story. >> "halftime" is over and the second half of your trading day begins now. >> scott, thanks very much. we're all over social mediap. we're all over the stock market as equities do push higher, the nasdaq crossing 4,000 for the first time since september of 2000. so how much higher can these equity market goss? some are now saying the dow might get to 18,000 in the not too distant. a ceo shakeup at the biggest company in the world by revenues, walmart. can the new guy help revive lackluster sales and is the stock a buy now? and speaking of retail, the countdown to christmas is on.
30 days until you know what. so we're going to talk about where americans are going to be shopping this year, what they will be buying and the retailers that are set to win. and those that will be left out in the cold. speaking of cold, there are some -- look at that, i don't know what that it is but looks bad. snow, of course. that would be cold. major headaches expected for travelers as we head towards that thanksgiving holiday. big winter storm stretching from the southwest to the eastern seaboard. it will be coming up the west as i show you there. we'll track it first to sue at the new york stock exchange. >> clear sailing down here but we're watching shares of walmart, the biggest retailer announcing a ceo shakeup. the timing is raising questions as we head into the crucial hol kay season. walmart shares are up about two-thirds of a percent, the stock up 17% this year lagging the market. courtney reagan here with the retail detail. >> good afternoon, sue. while walmart didn't allude to
the fact that a transition was actively in the works neither the choice of mick million as the incoming ceo or the timing is surprising. doug mcmillon is the ceo of walmart international. known more as a merchant with international expertise where mike duke is regarded for his expertise in logistics. walmart says his decision to retire is a personal one. mcmillon spent 22s years at walmart and just 47. his first job was a summer associate in a distribution center. having heard from one analyst surprised by the news, many thought mcmillon was on the short list along with walmart u.s. ceo bill simon. it is walmart's busiest week of the year but the planning has been in the works for months. mike duke told the board of his decision in november, when the vote was cast for mcmillon which is how it happened with duke when his predecessor scott
announced he would step down. duke will be ceo through the holiday quarter and will transition mcmillon over the next couple critical months as lee scott did for him. the company lines up with the company's fiscal year. they will close out the all-important holiday quarter and mcmillon will take over. duke will remain as chairman, stay on and advise mr. mcmillon and the like. >> thank you very much. let's get reaction to the news. cnbc market analyst stacy and chris, retail hardlines analyst at jpmorgan. what's your immediate reaction to this walmart news? >> not totally unexpected. and if you think about doug's background here he's been with the company 20 plus years. he's a lifer at walmart and also has the experience. he's been on the u.s. side, sam's club and international. he has all the memtss to put together that make sense. >> they typically stay in-house when they change ceos, don't they? >> they do. the past two ceos have been within house. i would add that doug adds a lot of polish.
ambassador for walmart being ceo, a good merchant, spread around between u.s., sams's and international and very polished. >> where are you on this stock some. >> neutral. >> neutral. $82 price target. >> what would you like to see them do differently than they're doing today to get that stock moving higher? >> i think the best bull case for walmart is if they took another $2 billion out of capital spending, pushed that through to the dividend, maybe acted like a more mature retailer in the u.s., not grow as many small box stores and return that capital to the shareholde shareholders. >> this is a company that has had controversial around it. the mention man bribery scandal. talk to me about that the new ceo's connection because he ran international, if any to that particular event and i don't know if you've noticed they're doing a lot of image advertising these days, saying we're not as bad as you think. we're promoting 600 people a day. >> right. >> what are the image issues here that the new ceo has to
face and what is his history with the connection to that? >> i think there are definitely some rebuilding in terms of the image after the controversy and so they're going out there and saying we're making our employees on thanksgiving but feed them, give them a 25% discount, treat them better. so they're definitely going out and trying to rebuild that image after the scandal. >> what about the international thing. is the new guy, is he connected to that at all? >> he came in actually post that era. he's, you know, he's clean in this. >> free and clear. >> clean in this. >> we're going to take a break here and -- not a break but we're going to separate from you for a minute and come back and talk to us about retail and this holiday season in just a moment with christmas exactly a month away. send it over to dominic chu for a market flash. >> so biogen is continuing its surge which started on fridays when the company received in essence a patent approval for ten years in europe for its
multiple sclerosis drug. once it gains approval from the european union and regulators that is expected to happen some time in the year future. those shares continuing their bull run. back to you. >> thank you very much. breaking news on the bond market, the two-year note going off the board for action. rick santelli is tracking the action. >> a-minus auction. the two-year notes referenced earlier ha were auctioned at 1:00 eastern had a yield of.30. which was the offer side of the one issue market. very aggressive. 3.54 was the bid to cover versus ten auction average at 3.28. best since april 23rd. directs at 27.3, best since april 23rd. very solid demand on that a-minus auction. these are the smaller auctions for 34 straight months we had $99 billion, they've trimmed the two year and rests at $96 billion, down from 35 to 32 as
this auction went off. sue, back to you. >> still a lot of money, rick. appreciate it very much. the nasdaq finally crossing above the widely watched 4,000 level. haven't seen that since september of 2000. right now the nasdaq has been hovering beebe lo that level at 3996.94. the nasdaq the big winner up 32%. outperforming both the dow and the s&p. sheila dharmarajan is following the big movers at the nasdaq for us. hi, sheila. >> hey, sue. we've been talking about it for weeks but today we finally hit the all-important 4 k mark. plenty of time until the closing bell. for the stocks that aren't joining the nasdaq 4k party. keep an eye on qualcomm down today after the company said china was investigating one of its business units. ebay taking a hit, coming out with a cautious note about its cyber monday sales an got to mention the internet stocks, facebook, pandora, yelp, all taking a beating today.
no real headlines but a lot of people saying there could be twitter sympathy trading going on. for what's been helping lead the nasdaq higher today and this entire year, got to talk about biotech stocks. the nasdaq biotech index all-time high today. dom mentioned biogen one of the names helping the index but keep your eye on gilleyd as well. >> thank you very much. see you in a little bit. taking a look at oil, prices are under pressure following the historic nuclear deal with iran penned over the weekend. the u.s. and five other world powers involved in that. right now west texas intermediate crude down better than 1%. do we go lower or not? sharon epperson is at the nymex taking a look at that question. over to you. >> let's take a look at where we've come from here in terms of iran's oil exports. we are looking at under this deal, the u.s. saying that it will not tighten sanctions against iran. they could be dropped in the next six months, a big if, but
we've already seen oil exports from iran go from 2.5 million barrels in 2011 before the eu/s u.s. sanctions to 2012, 1.5 million barrels and in october 715,000 barrels per day for iranian exports. under this deal the exports would be limited to 1 million barrels per day and if they actually reach that level that would be an increase in supply of about 285,000 barrels per day or an increase in exports. that should pressure prices. but what traders really need to see is a long-term binding agreement for a sustained, dramatic decline in oil prices. that's when analysts and traders are telling me. if that does happen kevin book clearview energy analyst says we could see brent crude prices at $90 a barrel. we saw a dramatic drop last night when the market opened and brent prices drop $3, only down about 30 cents right now. if we continue to see oil prices slide and it's a dramatic drop
some analysts say we could see prices at the pump below $3 a gallon. we can only hope. >> exactly. thanks very much. will the nuclear deal with iran boost the stock market higher? we're a little higher today. here's what morton school -- wharton school professor said on cnbc expecting the dow to go much higher. >> my data shows the fair market value based on current earnings for the dow is probably around 18,000. now it doesn't mean we're going to get there right away or get there in a straight line. boy, we've had a long time without even a 10% correction. but i don't think this bull market is over yet. i still think there's good gains to examine. >> both of these gentlemen were chuckling during that sound bite require right here. joining me on the nyse floor is a gentleman a little cautious scott colleges and kenny polcari who you know is director of o'neill securities and a cnbc market analyst. you know, when i hear big numbers like 18,000, it makes me
a little nervous given how far we've come, scott. >> listen, this monday of thanksgiving week, let us be thankful for how far we've come. >> absolutely. >> it reminds me of that old adage in the short run the market is a voting mechanism, the price function, the long run it's a weighing mechanism. to start putting out nice figures like 18,000, 20,000 ignores the underlying engine of what actually drives the market. >> right. >> kenny? >> it gets frustrating when you hear a comment like that, he said the dow could go to 18,000 and -- >> of course. >> it's going to go to 20,000. didn't say when it's going to happen. of course it's going to go to 18,000 at some point. when somebody hears that, they think the dow is going to 18,000 next week. that's not happening. >> it's not happening. and, you know, given the trajectory with which we've reached these market levels, scott, i know you're a little concerned not necessarily saying something will happen. >> right. >> but if it does happen, given how high we are that the trajectory to the downside could be tough as well.
is that a correct read? >> a combination of the fact that earnings growth has begun to wane as the benefits of cost cutting are largely behind us, margins at all-time highs, add that valuations are full or slightly expensive and on top of that a lot of investor complacency that's a fragile environment. >> and all the fed stimulus which is fueling it. so the conversation becomes and every time it happens the fed starts to taper the market starts to get antsy and you can feel the anxiety. the fed knows it can't really pull back right now. it continues to fuel this conversation. >> absolutely. you think investors need to do three things. tell me? >> rebalance. >> rebalance, trim back and insist on a valuation discipline. one of the early casualties of a bull market like this, discipline. >> that gels with what you said v a plan, stick to the plan. >> use the outliers as a source of cash and reallocate the money as he describes it. put put it in the ones you view
as the underperformers that will do better in the next year. >> what areas of the market do you still see value in, scott? >> it's getting hard. where we've redeployed assets this year is outside of the united states. we've put money to work in emerging markets because the valuation gap to the u.s. is so wide. >> europe has to be separate from the emerging markets, the real european markets. >> europe is turning a very big corner and there are valuations beginning to arise. >> gentlemen thank you very much. good to see you again. gobble gobble happy turkey day. ty, up to you. >> thank you very much. a major winter storm threatening thanksgiving travel plans in many parts of the country. the weather channel's ja nel klein has the late e. >> reporter: the storm has alreadies caused 13 deaths and countless accidents and will hit at least 20 states by the time it's over. it's brought with it snow, rain and ice to much of the west. heavy rains in some parts causing flooding, heavy snow in other places causing whiteout
conditions. the storm is not over yet, however. and the timing could not be worse as it moves east, travelers are very concerned about getting around for the thanksgiving holiday travel season. they know it could be difficult both on the roads and in the air as this threat of ice continues. in dallas, ja nel klein, nbc news. back to you. >> the countdown to christmas is on. 30 days to go. that's all. the number of big retailers are planning to open, of course, early on thanksgiving day. where do americans plan to shop? what do they plan to buy? also which retailers stand to win this year in the stores that will be left out in the cold. plus which retailers do consumers like the most and the ones they can't stand. we got a naughty and nice list coming up. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time.
plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) ranked highest in investor satisfaction with self-directed services by j.d. power and associates. you get your coffee here. you get your hair cut here. you find that certain thing you were looking for here, but actually you get so much more. when you shop at these small local businesses, you support all the things that make your community great. the money you spend here, stays here. in this place you call your neighborhood. this saturday is small business saturday. get out and shop small.
welcome back to "power lunch." we're on the verge of one of the busiest shopping events of the year. today a good day for the big name retail stocks. macy's, walmart, costco, amazon.com, all hitting fresh record highs today. strengthp in the economy and lower gas prices helping some of those consumers out. some of the reasons we're seeing the bullishness. now it's about whether consumers really do go out there, tyler, and spend some of that money. back to you. >> i will be spending. i've already picked out a very expensive pair of sox for you. >> thanks. >> it's a month before christmas and people are lined up outside of best buy. look at that.
tents out front of best buy waiting for the black friday deals. so will this holiday season be a good one for retailers as they face among other things higher payroll taxes, the new health care law, fewer shopping days. experts with us in the studio. chris, the retail hardline analyst at jpmorgan. joining us from minneapolis which is where best buy is based, neely, senior research analyst at piper jaffray. welcome. first of all we spoke to several shoppers about the retail climate this year and let's listen to what they had to say. we got a yule log burning here. nice and warm. >> i will be doing black friday, actually doing black thursday which is thanksgiving night hitting a few of the stores because they are advertising the sales. definitely hshg and m, probably walmart, target, the regular glares, big box stores. >> i think i'm spending a little more this year. basically because my income is a little higher this year so i have a little more spending
money. >> last year i knew i got a bonus, so that definitely impacted my shopping habits but this year i'm not sure where -- what's going to happen. >> let's start folks with a general thought about what you expect this year. is this going to be a year of heavy discounting, heavy promotions. >> it's already started. pre-black friday deals from walmart last week, best buy announced they're going to match them as well. getting daily deal e-mails. >> is that what you're seeing and are there price wars out there? i'm thinking especially of electronics where amazon is competing, walmart is competing, best buy. cont that crush their margins some. >> it does. these companies have prepareds us for this so best buy on the recent call said watch out, watch out for gross margin this quarter because they are going to take walmart on. walmart is going to be aggressive with price, best buy is going to match. throw in amazon. amazon is doing deals, hot deals every ten minutes starting friday through black friday. >> neely, how about you?
what do you see and i know one of the areas you follow is the most especially apparel and some of those big companies which didn't have a particularly great holiday season last year? >> no. it didn't. mainly because the weather was so warm. there was no reason to buy anything new in the cold weather apparel. that could be the counterintuitive story that happens this year. you get those winter temperatures and we're already seeing them and you actually could get the conversion on some of that apparel his year. >> chris, let me turn back to you. one of the companies that has had in the stock market a major comeback has been best buy. >> yes. >> do you think they're going to do well this holiday season? are they ready to compete? >> they are. i think they're going to be the biggest winner this holiday season. couple things driving that. electronics always the hot item. a couple changes out there. playstation 4, xbox one driving traffic to the stores, and also in the tvs you can get a 60 to 70 inch tv, $1,000 or lower.
an that's a price point that the consumer responds to on a mass basis and at the same time a new management team who's executing the story much better. >> what about the point that stacy was making the competition is going to had hurt their margins, that as they come down to price match, they get squeezed? >> best buy started matching amazon prices a year ago. they've always matched walmart. you had this pre-black friday deals on friday. we were out in the stores, not a big difference going on out there. the consumer didn't know about it. >> getting a little warm in here? i don't know. >> little heat from the fire place. we asked shoppers what the hot items are this year. take a listen and get some response. >> for christmas i bought my boyfriend an apple tv and iphone. >> ipad. my brother is in college, i'm in college, tablets are big. >> we're thinking about buying the apple tablets. pretty good buy. >> ipad air. >> ipad. >> my sons, they want electronic. they all want ipads and phones. not going to get them ipads or
phones. probably sam sung or one of the cheaper tablets. >> a pad, tablet christmas, electronics christmas. >> it is. that's a huge category. walmart has said they're building their inventory up 60% in tablets, more big screen televisions on sale. that's a focus. again, that's why you are going to hear potentially margins go thud in the fourth quarter. >> neely, what do you say? we're talking about apparel. if everybody is buying tablets does this mean that the apparel isn't going to sell? >> well, certainly it could be an electrifying sort of christmas for the nonapparel categories, right? however, pay attention to the overall trend here. everybody is going to mobile. we say it's a very important to understand how to engage with their customers, apparel or nonapparel, for the mobile portal because that's how everybody is going to start searching come spring when
they're looking for something to buy. focus on mobile with all of these retailers. those who have mobile win. >> chris, we talked about -- what about some of the others, target, walmart, costco, are they going to have good years or not such good years? >> costco will continue to have a good year. we're on the fourth consecutive year of 4% traffic growth, 8 months month -- a lot of ways. target will get more lift out of the gaming side, more exposure to that category. walmart is controlling that price message and we've heard from retailers if you don't get them on black friday, they're not coming back. >> you've been nodding here. you agree with what chris is saying? >> yes. i would point out as we discussed black friday starts last friday so you want to look at companies like macy's. because i think investors might give a pass to the retailers who gain share this year. >> macy's, you were the one that
two years ago started talking about macy's and you've been right. are they ready for this year. >> they are ready and one of only a handful of retailers that outperformed in the third quarter. they are prepared for fourth quarter and as neely was saying they're one of the ones that went after the integrated omni channel first. so still top pick. >> let's look at clothing now and see what shoppers are saying are popular in stores. >> i'm buying a lot of clothes, shoes. >> always clothes. clothes always number one. >> the brands that i usually like, banana republic, the gap and j. crew. >> i like gap kids. they have a lot of cute stuff and children's place. >> macy's, jc penney, walmart. >> i'm doing a the lo of on-line, my habit, guilts that offers the designer brands. got to love mayy's, lord and taylor, nordstrom, knneiman ma s marcus. >> the buying on in apparel but
you like among others jw nordstrom. >> you bet. we like nordstrom. they're the only retailer in the nation that can take you on line and off line, full line luxury shopping as well as down to the discount treasure hunt shopping. they have four different divisions and they service four different types of customers. we say focus on the guy who knows how to gain that market share for this holiday and into next year. nordstrom is our winner. >> chris, is there a sleeper in this category of retail this year? and a sleeper stock? >> i think it's dick's sporting goods. neeley mentioned how cold it's going to be, coldest black friday weekend in 25 years. the fifth coldest winter overall in 22 years. people want their north face, they want their under armor fleece, nike fleece and going to dick's. >> you got a sleeper? >> i would agree, the foot ware category first of all is the most exciting category, the new handbag. nike, uggs, deckers, how those
are flying off the shelf. good thing we have a fire place here because it's so cold out. >> it's really nice. >> we should do this every day. >> it's calming, it's nice, it calms you down. stacy, chris, thank you very much. neely, thank you as well. >> thank you. >> i'm jealous. we don't have a yule log down here on the nyse. sticking with retailers, which retailers do consumers like the most? and which try to slap you with the hidden fees, fine print and unfriendly practices? jackie deangelis is looking at which are being naughty or nice this holiday shopping season? hey. >> good afternoon, sue. consumer reports is out with its fourth annual naughty and nice holiday report card. they've combed through the fine print of retailers, airlines, tellco companies to see who merits scorn and praise for their policies and practices this year. take a look first at the nice list. companies going above and beyond this holiday season. at lands end if you have to return something you aren't
confined to a 30 day window. the merchant has an unconditional return policy at any time for any reason, that even applies to personalized and monogrammed items. at hampton inn and suites the 1-800 unit brand owned by hilton says if you're not completely satisfied you aren't expected to pay at all. you're guaranteed are friendly service, clean rooms and comfortable surroundings every time. moving on it to the naughty list, pardon me, these companies got a thumb's down this holiday season. best buy is one of them, now requiring identification for returns and retaining the right to store information based upon that. they are warning some customers that based on their frequent return patterns they will not be eligible for returns or exchanges for 90 days. and then there's amazon the 11th largest retailer raising the requirement for its free super saver shipping. customers are required to spend $35 in order to receive that service. it used to cost just $10. interesting move here by both
sides the fought naughty and n how these policies help or hurt the bottom line and how consumers respond. back to you. >> thank you very much. we have a shortened trading week because of thanksgiving, of course, but it could be a volatile one. how should you position yourself? dominic chu is here to break it all down. >> sue, thanksgiving isn't just about talking turkey. talk steak too. investors like the bullish run of thanksgiving week. keep it here on "power lunch." because after the break, we're going to talk turkey and bulls about investing in the markets. hi honey, did you get the toaster cozy?
yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year [ ding! ] at the lexus december to remember sales event. this is the pursuit of perfection.
in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.
welcome back. i'm sharon epperson on the floor of the nymex. the gold, we saw gold prices drop dramatically overnight, more than $15. gold was down on the heels of that deal on iran's nuclear program. but we've paired a lot of those losses down, only a couple bucks going into the close. we are looking at gold prices where traders are saying iran is po not the factor they're watching. the december options on futures expire today and we're going to see a rollover to the february contract. that's really what they're watching right now. they're watching that 1200 level for gold to see whether we get there. because some are saying credit suite analysts family that we could see miners cut their dividends if we see gold below $1200 an ounce. back to you. >> i'm sure they are. thank you very much. as a holiday shortened trading week, market is closed thus for thanksgiving and closes
early on friday. how should you position yourself heading into thanksgiving? sometimes we get a lot of volatility. dominic chu has startling stats for us. >> if you thought thanksgiving was just about turkey you would be mistaken right. did you know over the last decade the three days leading up to turkey day have all been great times to own stocks. now all three major u.s. stock averages finished higher on average during this three-day span. here's how the numbers break down. for the dow industrials the monday through wednesday span is producing an average gain of 0.8%, and the index up 6 out of the last 10 years. with the s&p 500 the numbers get more bullish. an average gape of about a quarter of one and a quarter percent and positive results seven out of the last ten years and then the nasdaq composite the king of the thanksgiving trade hill is up an average of 1.5% and has been up 8 out of the last 10 years. and since it's shopping season how about a look at one of the top performing s&p 500 retailers during this span.
it's nordstrom up 7% a year for each of these three days going back to the last decade. so again, huge boost for nordstrom this three-day span produces big gains for these types of stocks. back over to you. >> thank you, dom. nasdaq hit 4,000 today crossing above it, a level not is seen since september of 2000. which names have been left behind. sheila dharmarajan is back with the nasdaq losers and whether investors should take a second look at them. >> with the nasdaq hikts the big 4 k number, we decided to take a look at the numbers that haven't been joining in the nasdaq party. it's a pretty short list. in fact, out of the nonfinancial names in the nasdaq 100 only 12 stocks are in the red this year and of those 12 names, only six of them are down more than 10%. so who are the big nasdaq losers? well, two big notable ones are apple and ebay. both stocks, in fact, are down year to date. we're also seeing weakness when
it comes to networking, chip names. stocks like broadcom, krits trix systems. when taking a look at the biggest laggards in the nasdaq 100, some interesting names here intuitive surgical, nuance communications and also you have ek question mix. what's the deal here? is this time for investors to go bottom fishing, good buying opportunity here? traders tell me look, any time you have stocks that aren't joining with the rising tide of the equity market you want to be cautious. for certain names it's a fundamental business story like intuitive surgical and robotic arms. for other names it's a bet on growth like the networking names and whether te can keep up with competition. when talking about a name like apple, this is one of the names we talk about all the time here on cnbc. and as for the next catalyst for apple could be all about holiday sales. is it going to be the season of the ipad? that's certainly what it to keep an eye on if you want to trade apple next.
back to you. >> thank you very much. to the bond market where they have their eye not only on interest rates but the dollar yen. that's been a very interesting trade. and rick santelli is tracking all of that for us at the cme. hey, rick. >> you got it, sue. on both scores. if we look at a one-year chart of two-year notes the maturity we auctioned off at 1:00 eastern this chart, that two-year note traders are buying into low interest rates for a long period of time. but when you go to the under side of the curve look at a one year of tens you can see the market driven rates have a different mentality hence the curve steepening. look at an intraday of tens, the rate drop that happened as pending home seas was coming out at 10:00 eastern and that number was weak. the last chart sue was referencing an intraday of the dollar yen which is moving higher, since the highest levels of may and many believe if you think any type of a taper is in store and all stimulus is
fundamental this trade should keep on going. back to you. >> thank you very much. draw your attention, nasdaq 3999.67 right now. boeing shares getting clipped today. two very big stories coming out of the world's biggest plane maker. one involving its dreamliner. you need to hear this. backlash by the bay. why some san francisco residents are now getting upset over the tech boom. sparked by facebook and twitter among others. we'll be right back. (vo) you are a business pro. maestro of project management. baron of the build-out. you need a permit... to be this awesome. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow.
go national. go like a pro. you really love, what would you do?" ♪ [ woman ] i'd be a writer. [ man ] i'd be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] i'd be an architect. what if i told you someone could pay you and what if that person were you? ♪ when you think about it, isn't that what retirement should be, paying ourselves to do what we love? ♪
welcome back to "power lunch." hitting a 13-year high today after the company said its experimental treatment for a type of urinary tract infection shown it was as effective as an antibiotic. cubis up on that piece of news. >> thank you very much. time for the "power lunch" countdown. cnbc's phil lebeau joins us from chicago. three big stories that fall in your area, phil. first boeing soliciting bids for its new 77 x production site.
who's in contention sp. >> it's too early to say any one location has an edge over others, although there are natural advantage certain locations have. here are a few of the cities we've confirmed independently as well talking with sources in the running for the landing the 777 x location. seattle, washington, because of the facilities there, long beach, salt lake city, huntsville, alabama, and the boeing facility in charleston. keep this in mind, boeing says it will not negotiate with the machinist union out there in seattle which is interesting because if they were to work out a deal at the last second, you wouldn't see anything develop, sue. but as it is right now boeing says it is moving forward and will make a decision some time early next year about a 777 location. i know that you asked the ceo about that last time you talked to him. very interesting. boeing advising airline about the risk of engine icing problems on the 747 and 787
dreamliner planes with engines made by ge. the carriers are urged to avoid flying near high-level thunderstorms. what more can you tell us about what ge's response has been? >> well ge believes that they could to bedo a software fox. the engines which are prevalent on the dreamliner, not the only engine and also on some of the 747. some ice crystals may form when they are flying over high altitude thunderstorms. six incidents where a temporary thrust loss occur within the engine. the thing to keep in mind here, sue, is that they believe this is a problem they can solve relatively easily with a software fix and again, some dreamliners on select routes, select routes, have been pulled from those routes purely a precaution to make sure they're not going over areas where you could see high altitude thunderstorms. >> especially at this time of year, certainly. next fiat saying a chrysler ipo is not happening by the end of
2013. we're almost at the end of 2013. perhaps that a no braper. what does it tell us what's going on behind the scenes? >> still negotiating, sue. officially they will say they are moving forward with the ipo process. they have to say that. this is a tug of war. when you look at the two sides who are involved here, the viba trust, it want the most money possible for its 41.5% stake in chrysler, it wants as much money as possible so it is pushing the idea of an ipo. chrysler doesn't want this. he said he doesn't want that. they have pushed this out to the first quarter. let's see if this even happens. we haven't heard about a potential road show. >> absolutely. and that's the first step. so we will see. thanks, phil. appreciate it. >> you bet. >> up to you. >> the wealthy chinese pulling money out of china and sending it to sunny california. diana olick is following the money. >> well, tyler, they're sending not just their cash but their children. we'll it tell you why coming up next on "power lunch." estly, i e with a better camera.
my boyfriend has a lot of can't-miss moments. i checked out the windows phones and saw the lumia 1020 has 41 megapixels. so i can zoom way in even after i take the picture. and i can adjust the shot before i take it so i get it exactly how i want. so, i went with a windows phone. maybe i just see things other people don't. ♪ honestly ♪ i wanna see you be brave ♪ ya know, with new fedex one rate you can fill that box and pay one flat rate. i didn't know the coal thing was real. it's very real... david rivera. rivera, david. [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex.
welcome back to "power lunch." this chinese internet company hammered after they downgrade the stock to a hold from a buy following the company's earnings report. they say the first half of next year will be rough for the company and put limits on its performance. believes it remains a longer term investment overall. >> time for our yahoo! finance question of the day with christmas only one month away, have you started your holiday shopping? 72 -- 32 say yes, i've started, 42% say no i'll start after thanksgiving, and 26% say no i'll wait until the very last minute. all right. let's see what's coming up on "street signs" right now. i haven't started mine yet. nervous. >> i started on the weekend. very rare for me. hi, sue. coming up on "street signs," top of the hour, all the top stories. for example, what the shakeup at
walmart and blackberry means for you. also do you like getting the best deal and comparing prices when you shop? the president of price grabber is going to be joining us with a surprising finding and a stock that keeps on defying the odd. all those things and lots more on this monday edition of "street signs." back to you on "power lunch." >> thank you very much. wealthy chinese are pulling out of -- pulling money out of china at a startling rate, but where's it going? one place apparently is real estate. southern california. diana olick is following the story from not sunny california but chilly washington, d.c. diana? >> irvine, california, thousands of potential buyers are touring models. the vast majority of them are chinese and most steered clear of our cameras. >> they see the market here still room for appreciation. >> reporter: irvine realtor kenny young's phone is ringing off the hook. >> what's driving them over here
is they have this cash that they have and they want to park it somewhere or invest somewhere. >> reporter: they're not just investing in real estate, they are investing in their children's future, specifically their education. >> we're seeing a lot of asians who are buying here as an investment but the kids are going to school here. >> reporter: that's brian yang's plan whom we spoke with from china via skype. he bought an older home in irvine and plans to move there in five years when his daughter turns 10. >> education in america is very good. so the first one is for education. and i think the second one is for property appreciation. >> reporter: for now he's renting the home an getting a 5% return. over in the new great park neighborhood development big u.s. builders like lennar, pull it te, riland are rushing to
cash in, even employing the multigenerational floor plans and feng shui designs that chinese buyers want. cash is king. a limitless amount. >> the price they're looking is -- it doesn't matter, 800, 1 million, 1.5, they like it they will purchase it. >> reporter: while education and investment are the primary drivers, quality of life doesn't hurt either. many of the buyers we spoke to said they like the climate and the lack of pollution in california and political stability didn't hurt either. as for where all that cash is coming from, nobody really wanted to talk about that. sue? >> i can understand why. diana, thank you very much. said to be less harmful, and one plus is that you can smoke them anywhere. well, maybe not. now one major airport is changing that. opening the world's first vapping zone. is this a sign the popular product will eventually follow
the same rules as real cigarettes. that's coming up in today's power lunch rundown next. obligations, but obligations. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts.
tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading. but it sure feels that way. because with power ports... and wi-fi... and in-seat entertainment, for everyone on board, now when you fly, time flies too. (flight attendant) sir, we're about to land. (vo) we're adding a brand new plane, with all this, every week. it's just one way we're building the new american.
john fortt there. kayla, savers may end up paying the price of the fed's taper why? >> you used to earn interest on your savings. that's been gone a long time. banks take in deposits and make loans backed by the deposits but they don't lend back out gets stored in excess reserves at the fed. the amount stored by banks is up 64% from just last year. now the fed pays banks interest on these reserves. a quarter of a percent. minutes from the fed's last meeting showed most members open to lowering that interest rate as a signal that they'll keep other rates low too. in all, the if fed has $2.47 trillion from banks in those reserve balanceses meaning the industry earns roughly 600 plus billion in interest. they use the proceeds to pay for premiums to ensure the accounts at the fdic and some executives are saying if they make less in interest they may have to start charging consumers for deposits. in the last four quarters they only paid the fdic in $11
billion. it would seem we're far off from the two sides canceling each other out. it would be a pr nightmare. one of the reasons they won't do this because they can't explain it to the public and i seem to agree. >> i'm going to pay. option here is i'm going to pay the bank to hold my savings? >> right. and i did a straw poll of my twitter followers if all banks did this and you had no option where would you take your money? >> the first reserve of sele posture pedic. >> let's turn to you. recently rebased from the san francisco area and there's a story in the papers this morning about some people in san francisco don't like the fact that it has now become the home for so many high- income tech workers, blaming them on -- blaming those people for soaring real estate prices, income disparities, and so forth. is that a vibe that you felt out there in san francisco? >> oh, absolutely. i mean there are people really ticked off in san francisco thats there's like $3 toast
being sold now along the routes where the shuttles in san francisco will pick people up, the employees of apple, google, and sort of ferry they down to those companies. these are nice luxury busses with wi-fi and they know that the workers, the young tech workers, especially, want to live in san francisco but there's a backlash. we're not unfamiliar with that. on the east coast either. we see it happening in brooklyn. but as these areas grow, the fear they'll lose their long-term cultural appeal. >> like well, i don't know. some parts of san francisco where the cultural appeal would be chairtbly described as grungy. >> ar ts test ands toast pitch put out a report saying home prices in san francisco are overvalued by as much as 30%. the last time that happened was in 2003 and the run up to the housing bubble. so i would be a little mad if i wanted a ed forble housing and lived in a city where the wealth
effect was found that greatly. >> third topic of the hour and that is heathrow airport launching the world's first that we know of e-cigarette smoking zone. what does this mean for those popular products? e-sig soon be regulated just like regular cigarettes? will the people who use them like my 20-year-old who smoke them, be sent outside to smoke? >> maybe more of just a soishl thing putting a like-minded e-sig, called vapors. vaping. >> vaping. >> altogether so they can actually share in this interest. you're supposed to be able to do it anywhere and supposed to not have a smell or any effects for bystanders. if heathrow is doing this it makes you wonder. >> i am embarrassed to say, john, i don't know what the regulations would be in -- at newark airport or here in the newsroom at cnbc. >> i don't know either. for me, growing up like in brooklyn catching the vapors meant something completely
different. i'm not a smoker and i don't get the e-sig gret thing. if they are healthier people should be able to smoke them more places but it's not for me. >> appreciate it. >> biggest stock winners of the day when we return and there are some winners on this monday before thanksgiving. we'll be right back. ya know, with new fedex one rate you can fill that box and pay one flat rate. how naughty was he?
oh boy... [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year [ ding! ] at the lexus december to remember sales event. this is the pursuit of perfection. [ male announcer ] once, there was a man
who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade.
all right. let's get you up to date on the markets. the dow above the 16,000 mark, up about a quarter of a percent, less than that. the s&p is up almost two points. we have a better gain percentage wise in the nasdaq today up 11 points, better than a quarters percent to the upside. some of the other areas of the markets that are moving right now, we have west texas intermediate after the deal with iran penned over the weekend. down almost a full percent on the trading session at 9397. the ten-year note yields last week bumping against the 2.8 mark. today back down to 2.74% on the ten-year. top s&p 500 winners, da vitae, alcoa and biogen, alcoa a gain
of almost 4% and davita a gain of almost 9%. big percentage movers out there today. >> it's an interesting time. i look at the nasdaq above 4,000 and think how differently it feels in 2013 than it did in the year 2000. >> it does. "street signs" begins now. >> thanks for joining us. >> "street signs" as i said beginning now. nasdaq 4,000 and the global bull run. what's up with a market that seemingly won't go down? hi, everybody. welcome to "street signs" your other hot topics we're going to break down what happens to be or the hardest stock to understand this year, one surprising shopping trend that may be very good for an american icon an we introduce what we are now calling the world's greatest